Question

PB10-3 Recording and Reporting Current Liabilities [LO 10-2] Sandler Company completed the following two transactions. The annual accounting period ends December 31. a·On December 31, calculated the payroll, which indicates gross earnings for wages ($440,000), payroll deductions for income tax ($46,000), payroll deductions for FICA ($38,000), payroll deductions for United Way ($5,800), employer contributions for FICA (matching) and state and federal unemployment taxes ($3,800). Employees were paid in cash, but payments for the corresponding payroll deductions b. Collected rent revenue of $2,040 on December 10 for office space that Sandler rented to another business. The rent collected was for 30 days from December 11 to January 10 and was credited in full to have not been made and employer taxes have not yet been recorded. Unearned Revenue. Required: 1.&2. Complete the required joumal entries for the above transactions as shown below 0) Prepare the entries required on December 31 to record payroll () Prepare the journal entry for the collection of rent on December 10. (i) Prepare the adjusting jounal entry on December 31 (If no entry is required for a transaction/event, select "No Journal Entry Required" in th first account field.) View transaction list view journal entry worksheet No Date General Journal Debit Credit December 31 Salaries and Wages Payable 440,000 Withheld Income Taxes Payable FICA Payable Charitable Contributions Payable Cash 46,000 38,000 5,800 35.200 December 31 Payroll Tax Expense 41,800 FICA Payable State and Federal Unemployment Tax Payable 38,000 3,800 3 December 10 Cash 2,040 Unearned Revenue 2,040 4 December 31 Unearned Revenue 1,760 Rent Revenue 1,760

Please correct and complete part A & B, thank you so much in advance

Answer 1

Solution:

Part A:

Date	Particulars	Debit($)	Credit($)
Dec 31	Wages & salary A/c Dr	$440,000
	To FICA payable A/c		$38,000
	To Income tax withheld A/c		$46,000
	To Deduction payable United way A/c		$5,800
	To Cash A/c		$350,200
Dec 31	Expense of payroll A/c Dr	$41,800
	To Payable SUTA & FUTA A/c		$3,800
	To Payable FICA A/c		$38,000
Dec 10	Cash A/c Dr	$2,040
	To Rent revenue unearned A/c		$2,040
Dec 31	Rent revenue unearned A/c Dr (2,040*20/30)	$1,360
	To Rent revenue A/c		$1,360

Part B:

E-TECH INITIATIVES LIMITED Balance sheet (partial) As of date 31, 2015
Long term liabilities:
Bonds payable 6%	$450,000
Less: Discount	($13,500)
Carrying value	$436,500

Bonds issued at $97 = $450,000 * $97 / 100

= $436,500

Discount on bonds payable = $13,500

Note:

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